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Private Club Is Not Subject To Title VII Discrimination Law

Court finds that golf club meets the definition of “bona fide membership club” exempt from rules
Title VII of the Civil Rights Act prohibiting workplace discrimination specifically exempts a “bona fide membership club” that is federally tax-exempt under section 501(c). A federal District Court in Pennsylvania has recently decided that the Centre Hills Country Club in State College PA meets the definition and is exempt from the rules. It has dismissed on summary judgment a claim brought by a female former employee. The criteria for the classification are set out in the Compliance Manual of the Equal Employment Opportunity Commission. The Court says there appears to be only one appellate case in the nation reviewing the EEOC position, a 1996 Seventh Circuit Court of Appeals case dealing...

Appropriations Act Expands IRA Distributions, Curbs Conservation Easements, And Prohibits Definition for 501(c)(4) Groups

And Prohibits Definition for 501(c)(4) Groups Congress does not want IRS to define how much electioneering is permissible for social welfare organizations
The Consolidated Appropriations Act of 2023 passed at the end of the last session of Congress includes three provisions that are of specific importance to charities and other nonprofits. It expands the use of qualified charitable distributions from individual retirement accounts. It curtails the use of conservation easement deductions in certain tax shelter situations. And it again prevents the Internal Revenue Service from defining the amount of electioneering permitted by 501(c)(4) social welfare organizations. Qualified charitable distributions (“QCDs”) The law in 2022 allowed the holder of an individual retirement account over the age of 70 ½ to make distributions from the IRA directly...

Estate Planner Did Not Breach Duty By Failing to Disclose Basis of Fees

Court affirms plan that reduced bequests to daughters of couple who established charitable remainder trusts
A charitable estate planning firm did not breach a fiduciary duty to a married couple by failing to disclose the full basis of their fee arrangement with charitable beneficiaries of the plan, a California Court of Appeal has affirmed. Two daughters who sought to overturn the estate plan that reduced bequests to them have been rebuffed in a family fight over the estate. Lowell and Mary Lou Patton had been married for more than 40 years when Mary Lou became seriously ill with leukemia in early 2002. Since they had no estate plan, their long-time accountant recommended they see a lawyer. Mary Lou told the lawyer that she wanted to assure that her husband would treat their daughters fairly, but...

NY Attorney General Sanctions CEO of DAF Sponsor for Breach of Fiduciary Duty

AG permanently bars CEO from serving as fiduciary of a charity for misusing funds for personal benefit for himself and others
The Attorney General of New York has permanently barred the former CEO of the Foundation for Jewish Philanthropies in the Buffalo area from serving in a fiduciary capacity for any charity active in New York state after finding that the CEO misused approximately $3.1 million in donor advised and other funds held by the organization. In an Assurance of Discontinuance, the AG has recited facts about the conduct of former CEO Peter Fleischmann and “numerous breaches of fiduciary duty” in connection with his administration of charitable assets. He served as CEO from 1982 until his resignation in the summer of 2018 after being placed on leave. Assets of FJP, which was formed in 1911, grew from $1...

DAF Assets Top $234 Billion While Controversy Continues

Total distributions exceed 27% of fund value, while critics seek to delay tax breaks
Total assets held by donor advised funds across the country rose to $234.06 billion in 2021, an increase of 39.5% over the prior year, and continuing a steady annual increase in values from a total of $112.8 billion in 2017, according to the latest annual report from the National Philanthropic Trust issued in late November. The total number of DAFs held by the 995 DAF sponsors surveyed rose to 1,285,801, a 27.6% increase from the number in 2020, also reflecting annual increases up from 401,036 in 2017. Donors contributed $72.67 billion in new money to DAFs, up 46.6% from 2020, and the amount distributed rose to $45.74 billion, up 28.2% from 2020. Both contributions and distributions in 2021...

Gender and Race Gaps Narrow Slightly On Boards of Philadelphia Area Meds and Eds

While many have made significant progress since 2019, many still fail to reflect the diversity of constituents and communities
The Women’s Nonprofit Leadership Initiative and the Nonprofit Center of La Salle University have published an updated report focused on the boardrooms of the Philadelphia area’s largest nonprofit medical and educational institutions (“meds” and “eds”). The report reveals that many have made significant progress in the last three years in increasing the gender and racial diversity of their governing bodies. Many of the boards, however, still fail to reflect the diversity of the staffs, students, patients, and the communities they serve, and board chairs are still predominantly white males. “ Closing the Gaps: Gender and Race in Nonprofit Boardrooms ” follows their 2019 report on “The Gender...

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